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HomeMy WebLinkAboutContract 52016 CITY SECRETARY CONTRACT 140._ ECONOMIC DEVELOPMENT PROGRAM AGREEMENT This ECONOMIC DEVELOPMENT PROGRAM AGREEMENT ("Agreement") is entered into by and between the CITY OF FORT WORTH, TEXAS (the "City"), a home rule municipality organized under the laws of the State of Texas, and PARKER-HANNIFIN CORPORATION, an Ohio corporation ("Company"). RECITALS The City and Company hereby agree that the following statements are true and correct and constitute the basis upon which the City and Company have entered into this Agreement: A. Company is a global diversified manufacturer of motion and control technologies and systems that is searching for a location to establish a divisional headquarters facility. Among the locations that Company is considering for this corporate expansion project is an existing call center facility located at 4701 Mercantile Drive (the "Development Site"). In return for the economic development incentives set forth in this Agreement, Company proposes to renovate and expand the existing facility on the Development Site into an office and manufacturing facility of at least 242,400 square feet of occupiable space for Company's Stratoflex Divisional Headquarters (the "Required Improvements"). B. The Required Improvements will benefit the City by redeveloping and expanding a currently existing commercial building, with significant opportunities for employment and tax base growth. As recommended by the City's 2017 Comprehensive Plan, adopted by the City Council pursuant to Ordinance No. 22629-03-2017 (the "Comprehensive Plan"), and in accordance with Resolution No. 3716-03-2009, the City has established an economic development program pursuant to which the City will, on a case-by-case basis, offer economic incentives authorized by Chapter 380 of the Texas Local Government Code that include monetary loans and grants of public money, as well as the provision of personnel and services of the City, to businesses and entities that the City Council determines will promote state or local economic development and stimulate business and commercial activity in the City in return for verifiable commitments from such businesses or entities to cause specific employment and other public benefits to be made or invested in the City(the "380 Program"). C. The City has determined that the feasibility of the proposed corporate expansion project described herein is contingent on Company's receipt of the Program Grants, as provided in this Agreement. The City Council has determined that the proposed development and use of the Required Improvements will benefit and stimulate the local economy and that the 380 Program is an appropriate means to achieve this project. In addition, the City Council has determined that by entering into this Agreement the potential economic benefits that will accrue to the City and w,the tetvns - MpR 1 Z®fig OFFICIAL RECORD Nr� CITY SECRETARY between 1ofDevelopment Agreement Worth and Parker-Hannifin Parker-Hannifinn Corporation FT. 'IJti00RTIi,TX and conditions of this Agreement are consistent with the City's economic development objectives, as outlined in the Comprehensive Plan. This Agreement is authorized by Chapter 380 of the Texas Local Government Code. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: AGREEMENT 1. INCORPORATION OF RECITALS. The City Council has found, and the City and Company hereby agree, that the recitals set forth above are true and correct and form the basis upon which the parties have entered into this Agreement. 2. DEFINITIONS. In addition to other terms defined in the body of this Agreement, the following terms will have the definitions ascribed to them as follows: 380 Program has the meaning ascribed to it in Recital B. Affiliate means all entities, incorporated or otherwise, under common control with, controlled by or controlling Company. For purposes of this definition, "control" means fifty percent (50%) or more of the ownership determined by either value or vote. Base Grant Percentage has the meaning ascribed to it in Section 6.1. Central City means the area of the corporate limits of the City within Loop 820 (i) consisting of all Community Development Block Grant ("CDBG")-eligible census block groups; (ii) all enterprise zones, designated as such pursuant to the Texas Enterprise Zone Act, Chapter 2303, Subchapter F of the Texas Government Code; (iii) all census block groups that are contiguous by seventy-five percent (75%) or more of their perimeters to CDBG-eligible block groups or enterprise zones, as well as any CDBG- eligible block in the corporate limits of the City outside Loop 820, as more specifically depicted in the map attached hereto as Exhibit "A", attached hereto and hereby made a part of this Agreement for all purposes. Central City Employment Commitment has the meaning ascribed to it in Section 4.5.2. Page 2 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation Central City Employment Percentage has the meaning ascribed to it in Section 6.5. Central City Resident means an individual whose principal place of residence is at a location within the Central City. Certificate of Completion has the meaning ascribed to it in Section 5. Completion Date means the date as of which all occupiable space within the Required Improvements has received a temporary or permanent certificate of occupancy. Completion Deadline means March 31, 2019. Construction Costs means Hard Construction Costs, plus the following costs expended by Company directly in connection with construction of the Required Improvements: engineering, architectural and other design and consulting fees; construction management fees; and costs of governmental permits and inspection fees related to site preparation and construction. For removal of doubt, property acquisition costs do not constitute "Construction Costs." Development Site has the meaning ascribed to it in Recital A. Director means the director of the City's Economic Development Department or his authorized designee. Divisional Headquarters Operations means the primary location of division leadership responsible for managing the worldwide operations of the Stratoflex Products division for Parker Hannifin Corporation. Effective Date has the meaning ascribed to it in Section 3. Exempt Employee means an individual holding a Full-time Job provided by Company on the Development Site who is primarily performing work that is not subject to overtime provisions of the Fair Labor Standards Act. Fort Worth Certified M/WBE Company means a minority- or woman-owned business that (i) has received certification as either a minority business enterprise (MBE), a woman business enterprise (WBE) or a disadvantaged business enterprise (DBE) by the North Central Texas Regional Certification Agency (NCTRCA); (ii) has a principal business office located within the corporate limits of the City that performs a commercially useful function; and (iii) has provided from such office the services or sales that Company is seeking to have counted under this Agreement. Fort Worth Construction Percentage has the meaning ascribed to it in Section 6.2. Page 3 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation Fort Worth Construction Spending Commitment has the meaning ascribed to it in Section 4.4.1. Fort Worth Emplovment Commitment has the meaning ascribed to it in Section 4.5.1. Fort Worth Employment Percentage has the meaning ascribed to it in Section 6.4. Fort Worth Resident means an individual whose principal place of residence is at a location within the corporate limits of the City. Fort Worth Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.6.1. Fort Worth Supply and Service Spending Percentage has the meaning ascribed to it in Section 6.8. Full-time Job means a job provided to one (1) individual by Company for at least forty (40) hours per week. Hard Construction Costs means actual site development and construction costs expended by Company for the Required Improvements, including directly-related contractor fees, costs of construction labor, supplies and materials for site preparation, construction and landscaping, and materials testing. M/WBE Construction Percentage has the meaning ascribed to it in Section 6.3. M/WBE Construction Spending Commitment has the meaning ascribed to it in Section 4.4.2. M/WBE Supply and Service Percentage has the meaning ascribed to it in Section 6.9. M/WBE Supply and Service Spending Commitment has the meaning ascribed to it in Section 4.6.2. New Taxable Tangible Personal Property means any personal property that (i) is subject to ad valorem taxation by the City; (ii) is located on the Development Site; (iii) is owned or leased by Company; and (iv) was not located in the City prior to the Effective Date of this Agreement. Non-Exempt Employee means an individual holding a Full-time Job provided by Company on the Development Site who is primarily performing work that is subject to the overtime provisions of the Fair Labor Standards Act. Page 4 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation Personal Property Commitment has the meaning ascribed to it in Section 4.3. Program Grants means the annual economic development grants paid by the City to Company in accordance with this Agreement and as part of the 380 Program. Program Source Funds means an amount of City funds available for inclusion in a given Program Grant, which will equal a percentage (calculated in accordance with this Agreement) of the Project Real Property Tax Revenues, plus a percentage (calculated in accordance with this Agreement) of the Project Personal Property Tax Revenues received by the City during the Twelve-Month Period ending in the same year in which the Program Grant is payable. Project Personal Property Tax Revenues means City ad valorem taxes on New Taxable Tangible Personal Property located on the Development Site. The taxable appraised value of New Taxable Tangible Personal Property located on the Development Site for any given year will be established solely by the appraisal district that has jurisdiction over the Development Site at the time. Project Real Property Tax Revenues means City ad valorem taxes on the Development Site and any improvements thereon, including the Required Improvements, minus the taxes attributable to the base collective taxable appraised value of the Development Site and all improvements thereon for the 2016 tax year, which base collective taxable appraised value is Six Million Seven Hundred Seventeen Thousand Six Hundred Forty-Seven Dollars ($6,717,647.00). The taxable appraised value of the Development Site and any improvements located thereon, including the Required Improvements, for any given year will be established solely by the appraisal district that has jurisdiction over the Development Site at the time. Real Property Commitment has the meaning ascribed to it in Section 4.2. Records has the meaning ascribed to it in Section 4.9. Required Improvements has the meaning ascribed to it in Recital A. Salary means a cash payment or remuneration made by Company to an Exempt Employee for services rendered as an Exempt Employee to Company, including any paid time off, commissions, or non-discretionary bonuses paid in accordance with Company's published bonus plan, but does not include the value of any benefits provided to an employee, any reimbursements for actual and necessary expenses incurred by the employee in the course and scope of the employee's job duties, or any discretionary bonuses. Salary Commitment has the meaning ascribed to it in Section 4.5.4. Salary Percentage has the meaning ascribed to it in Section 6.7. Page 5 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation Supply and Service Expenditures means all expenditures by Company expended directly for the operation and maintenance of the Development Site and all improvements thereon, including the Required Improvements, excluding amounts paid for electric, gas, water and any other utility services as well as any amounts paid for temporary direct labor on the Development Site. Term has the meaning ascribed to it in Section 3. Twelve-Month Period means the period between February 1 of a given year and January 31 of the following year. Wage Commitment has the meaning ascribed to it in Section 4.5.3. Wage Rate Percentage has the meaning ascribed to it in Section 6.6. Wage Rate means a cash payment or remuneration made by Company to a Non- Exempt Employee on an hourly basis for services rendered as a Non-Exempt Employee to Company, including any paid time off, commissions, or non-discretionary bonuses paid in accordance with Company's published bonus plan, but does not include the value of any benefits provided to an employee, any reimbursements for actual and necessary expenses incurred by the employee in the course and scope of the employee's job duties, or any discretionary bonuses. 3. TERM. This Agreement will be effective as of the date of execution by both parties (the "Effective Date") and, unless terminated earlier pursuant to and in accordance with this Agreement, will expire on the date as of which the City has paid all Program Grants required hereunder (the "Term"). 4. COMPANY OBLIGATIONS AND COMMITMENTS. 4.1. Use of Development Site for Divisional Headquarters Operations. From the Completion Date until expiration of the Term of this Agreement, Company must use the Development Site for, at a minimum, its Divisional Headquarters Operations. 4.2. Real Property Improvements. Company must expend or cause to be expended at least Twenty-one Million Seven Hundred Thousand Dollars ($21,700,000.00) in Construction Costs for the Required Improvements by the Completion Date, and the Completion Date Page 6 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation must occur on or before the Completion Deadline (collectively, the "Real Property Commitment"). 4.3. Personal Property Improvements. Company covenants and agrees that New Taxable Tangible Personal Property having a value of at least Three Million Eight Hundred Thousand Dollars ($3,800,000.00) must be in place on the Development Site by January 1, 2020, as determined solely by the appraisal district having jurisdiction over the Development Site at that time (the"Personal Property Commitment"). 4.4. Construction Spending Commitments 4.4.1. Construction Spending with Fort Worth Companies. Company must expend or cause to be expended with Fort Worth Companies by the Completion Date the greater of at least (i) Four Million Three Hundred Forty Thousand Dollars ($4,340,000.00) in Hard Construction Costs for the Required Improvements or (ii) twenty percent (20%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Hard Construction Costs (the "Fort Worth Construction Spending Commitment"). 4.4.2. Construction Spending with Fort Worth Certified M/WBE Companies. Company must expend or cause to be expended with Fort Worth Certified M/WBE Companies by the Completion Date the greater of at least (i) Three Million Two Hundred Fifty-five Thousand Dollars ($3,255,000.00) in Hard Construction Costs for the Required Improvements or (ii) fifteen percent (15%) of all Hard Construction Costs for the Required Improvements, regardless of the total amount of such Hard Construction Costs (the "MIWBE Construction Spending Commitment"). Expenditures made with Fort Worth Certified M/WBE Companies will also count as expenditures made with Fort Worth Companies for purposes of measuring the Fort Worth Construction Spending Commitment. 4.5. Employment Commitments. Determination each year of compliance with the following employment commitments will be based on the employment data provided to the City pursuant to Section 4.7.3 for the year under evaluation. 4.5.1. Employment of Fort Worth Residents. Page 7 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation In 2019 and in each year thereafter for the remainder of the Term, Company must provide and fill with Fort Worth Residents at least the greater of(i) 210 Full-time Jobs on the Development Site or (i) forty percent (40%) of all Full-time Jobs on the Development Site, regardless of the total number of Full-time Jobs provided and filled thereon ("Fort Worth Employment Commitment"). 4.5.2. Employment of Central City Residents. In 2019 and in each year thereafter for the remainder of the Term, Company must provide and fill with Central City Residents at least the greater of(i) 105 Full-time Jobs on the Development Site or (ii) twenty percent (20%) of all Full-time Jobs on the Development Site, regardless of the total number of Full-time Jobs provided and filled thereon (the "Central City Employment Commitment"). Full-time Jobs held by Central City Residents in a given year will also count as Full-time Jobs for purposes of measuring the Fort Worth Employment Commitment in the same year. 4.5.3. Average Annual Hourly Wage Rates for Non-Exempt Employees. In 2019 and in each subsequent year of the Term of this Agreement, the average hourly Wage Rate for all Non-Exempt Employees, measured on a calendar year basis, must be at least Eighteen Dollars ($18.00)per hour (the "Wage Rate Commitment"). 4.5.4. Average Annual Salaries for Exempt Employees. In 2019 and in each subsequent year of the Term of this Agreement, the average annual Salary, measured on a calendar year basis, for all Exempt Employees must be at least Seventy Thousand Dollars ($70,000.00) (the "Salary Commitment"). 4.6. Supply and Service Spending Commitments. 4.6.1. Supply and Service Expenditures with Fort Worth Companies. In 2019 and in each subsequent year of the Term of this Agreement, Company annually must expend with Fort Worth Companies the greater of at least (i) One Million Four Hundred Thousand Dollars ($1,400,000.00) in Supply and Service Expenditures or (ii) thirty-five percent (35%) of all Supply and Service Expenditures made in the year in question, regardless of the total amount of such Supply and Service Expenditures (the "Fort Worth Supply and Service Spending Commitment"). Page 8 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 4.6.2. Supply and Service Expenditures with Fort Worth Certified M/WBE Companies. In 2019 and in each subsequent year of the Term of this Agreement, Company annually must expend with Fort Worth Certified M/WBE Companies the greater of at least (i) Eight Hundred Thousand Dollars ($800,000.00) in Supply and Service Expenditures or (ii) twenty percent (20%) of all Supply and Service Expenditures made in the year in question, regardless of the total amount of such Supply and Service Expenditures, (the "M/WBE Supply and Service Spending Commitment"). Supply and Service Expenditures made with Fort Worth Certified M/WBE Companies will also count as Supply and Service Expenditures made with Fort Worth Companies for purposes of measuring the Fort Worth Supply and Service Spending Commitment outlined in Section 4.6.1. 4.7. Reports and Filings. 4.7.1. Construction Spending Reports. 4.7.1.1. Quarterly Reports. From the Effective Date until the Completion Date, Company must provide the Director with a quarterly report in a form reasonably acceptable to the Director that specifically outlines (i) the then-current aggregate Construction Costs expended for the Required Improvements; (ii) the then-current aggregate Hard Construction Costs expended for the Required Improvements; (iii) the then-current aggregate Hard Construction Costs expended with Fort Worth Companies for the Required Improvements; and (iv) the then-current aggregate Hard Construction Costs expended with Fort Worth Certified M/WBE Companies for the Required Improvements. 4.7.1.2. Final Construction Reports. Within sixty (60) calendar days following the Completion Date, in order for the City to assess whether Company expended or caused to be expended at least Twenty-one Million Seven Hundred Thousand Dollars ($21,700,000.00) in Construction Costs for the Required Improvements by the Completion Date, and the extent to which the Fort Worth Construction Spending Commitment and the M/WBE Construction Spending Commitment were met, Company must provide the Director with a report in a form reasonably acceptable to the Director that specifically outlines (i) the total Construction Costs Page 9 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation expended for the Required Improvements as of the Completion Date; (ii) the total Hard Construction Costs expended for the Required Improvements as of the Completion Date; (iii) the total Hard Construction Costs expended with Fort Worth Companies for the Required Improvements as of the Completion Date; and (iv) the total Hard Construction Costs expended with Fort Worth Certified M/WBE Companies for the Required Improvements as of the Completion Date, together with supporting invoices and other documents necessary to demonstrate that such amounts were actually paid, including, without limitation, final lien waivers signed by the general contractor for the Required Improvements. 4.7.2. Personal Property Report. In order for the City to track its obligations under this Agreement, Company will notify the Director in writing once it believes that the Personal Property Commitment has been attained. 4.7.3. Annual Employment Report. On or before February 1, 2020 and February 1 of each year thereafter, in order for the City to assess the degree to which the Fort Worth Employment Commitment, the Central City Employment Commitment, the Wage Rate Commitment, and the Salary Commitment were met in the previous calendar year, Company must provide the Director with a report in a form reasonably acceptable to the Director that sets forth the total number of individuals, Fort Worth Residents, and Central City Residents who held Full-time Jobs on the Development Site, as well as the Wage Rate for each Non-Exempt Employee and the Salary for each Exempt Employee, all as of December 1 (or such other date requested by Company and reasonably acceptable to the City) of the previous year, together with reasonable supporting documentation. 4.7.4. Annual Supply and Service Spendinp,Report. On or before February 1, 2020 and February 1 of each year thereafter, in order for the City to assess the degree to which the Fort Worth Supply and Service Spending Commitment and the M/WBE Supply and Service Spending Commitment were met in the previous calendar year, Company must provide the Director with a report in a form reasonably acceptable to the Director that sets forth the total amount of Supply and Service Expenditures made during such calendar year, together with the aggregate amount of Supply and Service Expenditures made with Fort Worth Companies and with Fort Worth Certified M/WBE Companies during that same year. Page 10 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 4.8. Inspections of Development Site. At any time during Company's normal business hours throughout the Term and following reasonable notice to Company, the City will have the right to inspect and evaluate the Development Site and any improvements thereon, including the Required Improvements, and Company will provide full access to the same, in order for the City to monitor compliance with the terms and conditions of this Agreement. Company will cooperate fully with the City during any such inspection and evaluation. Notwithstanding the foregoing, Company will have the right to require that any representative of the City be escorted by a representative or security personnel of Company during any such inspection and evaluation. 4.9. Audits. The City will have the right throughout the Term to audit the financial and business records of Company or any Affiliate that relate to the Required Improvements and the Development Site as well as any other documents necessary to evaluate Company's compliance with this Agreement or with the commitments set forth in this Agreement (collectively "Records"). Company must make all Records available to the City on the Development Site or at another location in the City acceptable to both parties following reasonable advance notice by the City and will otherwise cooperate fully with the City during any audit. 5. CERTIFICATE OF COMPLETION. Within ninety (90) calendar days following receipt by the City of the final construction spending report for the Required Improvements submitted in accordance with Section 4.7.1.2, and assessment by the City of the information contained therein pursuant to Sections 4.8 and 4.9, if the City is able to verify attainment of the Real Property Commitment set forth in Section 4.2 (that is, that Company expended or caused to be expended at least Twenty-one Million Seven Hundred Thousand Dollars ($21,700,000.00) in Construction Costs for the Required Improvements by the Completion Date), and that the Completion Date occurred on or before the Completion Deadline), the Director will issue Company a certificate stating the amount of Construction Costs expended for the Required Improvements, the amount of Hard Construction Costs expended for the Required Improvements, as well as the amounts of Hard Construction Costs expended specifically with Fort Worth Companies and Fort Worth Certified M/WBE Companies (the "Certificate of Completion"). The Certificate of Completion will serve as the basis for determining the extent to which the Fort Worth Construction Spending Commitment and the M/WBE Construction Spending Commitment were met. Page i l Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 6. PROGRAM GRANTS. As more specifically set forth herein, if both the Real Property Commitment set forth in Section 4.2 and the Personal Property Commitment set forth in Section 4.3 were met, Company will be entitled to receive ten (10) annual Program Grants, payment of which will begin in 2020 and end in2029. The amount of each Program Grant will equal a percentage of the Program Source Funds available for that Program Grant, which percentage will be based on the extent to which the various commitments set forth in Section 4 were met and, specifically, will equal the sum of the Base Grant Percentage, the Fort Worth Construction Percentage, the M/WBE Construction Percentage, the Fort Worth Employment Percentage, the Central City Employment Percentage, the Wage Rate Percentage, the Salary Percentage, the Fort Worth Supply and Service Percentage and the M/WBE Supply and Service Percentage, as defined in Sections 6.1 through 6.9, respectively. In no event will any Program Grant exceed sixty percent (60%) of the Program Source Funds available for that year's Program Grant. 6.1. Attainment of Real Property Commitment and Personal Property Commitment(25%). Provided that the City is able to verify that both the Real Property Commitment set forth in Section 4.2 and the Personal Property Commitment set forth in Section 4.3 were met, each annual Program Grant will include twenty-five percent (25%) of the Program Source Funds available for that year's Program Grant (the "Base Grant Percentage"). 6.2. Fort Worth Construction Spending Commitment (Up to 5%). A percentage of each Program Grant will be based on the extent to which the Fort Worth Construction Spending Commitment, as outlined in Section 4.4.1, was met (the "Fort Worth Construction Percentage"). The Fort Worth Construction Percentage will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Construction Spending Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Companies by the number of dollars comprising the Fort Worth Construction Spending Commitment, as determined in accordance with Section 4.4.1. For example, if Company expended or caused to be expended $25,000,000.00 in Hard Construction Costs for the Required Improvements, the Fort Worth Construction Spending Commitment would be $5,000,000.00 (20% of $25,000,000.00). If only $4,500,000.00 in Hard Construction Costs for the Required Improvements were expended with Fort Worth Companies by the Completion Date, the Fort Worth Construction Percentage for each Program Grant would be 4.5% instead of 5% (or .05 x [$4.5 million/$5 million], or .05 x .90, or .045). If the Fort Worth Construction Spending Commitment was met or exceeded, the Fort Worth Construction Percentage for each Program Grant will be five percent(5%). Page 12 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 6.3. M/WBE Construction Spending Commitment (Up to 2.5%). A percentage of each Program Grant will be based on the extent to which the M/WBE Construction Spending Commitment, as outlined in Section 4.4.2, was met (the "M/WBE Construction Percentage"). The M/WBE Construction Percentage will equal the product of two and one-half percent (2.5%) multiplied by the percentage by which the M/WBE Construction Spending Commitment was met, which will be calculated by dividing the actual Hard Construction Costs expended for the Required Improvements by the Completion Date with Fort Worth Certified M/WBE Companies by the number of dollars comprising the M/WBE Construction Spending Commitment, as determined in accordance with Section 4.4.2. If the M/WBE Construction Spending Commitment was met or exceeded, the M/WBE Construction Percentage for each Program Grant will be two and one-half percent (2.5%). 6.4. Fort Worth Employment Commitment (Up to 5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Fort Worth Employment Commitment in the previous calendar year, as outlined in Section 4.5.1 (the "Fort Worth Employment Percentage"). The Fort Worth Employment Percentage for each Program Grant will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Jobs provided on the Development Site that were filled by Fort Worth Residents in the previous calendar year by the applicable number of Full-time Jobs constituting the Fort Worth Employment Commitment for the previous calendar year, as outlined in Section 4.5.1. For example, if 600 Full-time Jobs were provided and filled on the Development Site in a given year, the Fort Worth Employment Commitment for that year would be 240 Full-time Jobs (40% of 600 Full-time Jobs). However, if only 216 Full-time Jobs provided on the Development Site in that year were filled with Fort Worth Residents, the Fort Worth Employment Percentage for the Program Grant payable in the following year would be 4.5% instead of 5% (or .05 x [216/240]), or .05 x .90, or .045). If the Fort Worth Employment Commitment is met or exceeded in any given year, the Fort Worth Employment Percentage applicable the Program Grant payable in the following year will equal five percent (5%). 6.5. Central City Employment Commitment (Up to 5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Central City Employment Commitment in the previous calendar year, as outlined in Section 4.5.2 (the "Central City Employment Page 13 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation Percentage"). The Central City Employment Percentage for each Program Grant will equal the product of five percent (5%) multiplied by the percentage by which the Central City Employment Commitment was met in the previous calendar year, which will be calculated by dividing the actual number of Full-time Jobs provided on the Development Site that were filled by Central City Residents in the previous calendar year by the applicable number of Full-time Jobs constituting the Central City Employment Commitment for the previous calendar year, as outlined in Section 4.5.2. If the Central City Employment Commitment is met or exceeded in any given year, the Central City Employment Percentage applicable the Program Grant payable in the following year will equal five percent (5%). 6.6. Wage Rate Commitment (Up to 3.75%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Wage Rate Commitment in the previous calendar year, as outlined in Section 4.5.3 (the "Wage Rate Percentage"). The Wage Rate Percentage for each Program Grant will equal the product of three and three- fourths percent (3.75%) multiplied by the percentage by which the Wage Rate Commitment was met in the previous calendar year, which will be calculated by dividing the average hourly Wage Rate of all Non-exempt Employees in the previous calendar year by $18.00, which is the Wage Rate Commitment. For example, if in a given year the average hourly Wage Rate of all Non-Exempt Employees was $17.10, the Wage Rate Percentage for the Program Grant payable in the following year would be 3.56% instead of 3.75% (or .0375 x [$17.10/$18.00]), or .0375 x .95, or .0356). If the Wage Rate Commitment is met or exceeded in any given year, the Wage Rate Percentage applicable the Program Grant payable in the following year will equal three and three-quarters percent (3.75%). 6.7. Salary Commitment (Up to 3.75%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Salary Commitment in the previous calendar year, as outlined in Section 4.5.4 (the "Salary Percentage"). The Salary Percentage for each Program Grant will equal the product of three and three-fourths percent (3.75%) multiplied by the percentage by which the Salary Commitment was met in the previous calendar year, which will be calculated by dividing the average annual Salary of all Exempt Employees in the previous calendar year by $70,000.00, which is the Salary Commitment. For example, if in a given year the average annual Salary of all Exempt Employees was $63,000.00, the Salary Percentage for the Program Grant payable in the following year would be 3.375% instead of 3.75% (or .0375 x [$63,000/$70,000]), or .0375 x .9, or .03375). If the Salary Commitment is met or exceeded in any given year, the Salary Percentage Page 14 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation applicable the Program Grant payable in the following year will equal three and three-quarters percent (3.75%). 6.8. Fort Worth Supply and Service Spending (Up to 5%). Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the Fort Worth Supply and Service Spending Commitment in the previous calendar year, as outlined in Section 4.6.1 (the "Fort Worth Supply and Service Percentage"). The Fort Worth Supply and Service Percentage for each Program Grant will equal the product of five percent (5%) multiplied by the percentage by which the Fort Worth Supply and Service Commitment was met in the previous calendar year, which will be calculated by dividing the amount of Supply and Service Expenditures made with Fort Worth Companies in the previous calendar year by the Fort Worth Supply and Service Commitment for that year, as outlined in Section 4.6.1. For example, if Company made $4,500,000.00 in Supply and Service Expenditures in a given year, the Fort Worth Supply and Service Commitment for that year would be 1,575,000.00. If, instead, Company made only$1,260,000.00 in Supply and Service Expenditures with Fort Worth Companies in that year, the Fort Worth Supply and Service Percentage for the Program Grant payable in the following year would be 4% instead of 5% (or .05 x [$1,260,000/$1,575,0001), or .05 x .80, or .04). If the Fort Worth Supply and Service Commitment is met or exceeded in any given year, the Fort Worth Supply and Service Percentage applicable the Program Grant payable in the following year will equal five percent (5%). 6.9. Fort Worth M/WBE Supply and Service Spending (Up to 5%1. Each annual Program Grant will include a percentage of the Program Source Funds available for that year's Program Grant that is based on Company's compliance with the M/WBE Supply and Service Spending Commitment in the previous calendar year, as outlined in Section 4.6.2 (the "M/WBE Supply and Service Percentage"). The M/WBE Supply and Service Percentage for each Program Grant will equal the product of five percent (5%) multiplied by the percentage by which the M/WBE Supply and Service Commitment was met in the previous calendar year, which will be calculated by dividing the amount of Supply and Service Expenditures made with Fort Worth Certified M/WBE Companies in the previous calendar year by M/WBE Supply and Service Commitment for that year, as outlined in Section 4.6.2. If the M/WBE Supply and Service Commitment is met or exceeded in any given year, the M/WBE Supply and Service Percentage applicable the Program Grant payable in the following year will equal five percent (5%). Page 15 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 6.10. No Offsets. A deficiency in attainment of one commitment may not be offset by the exceeding attainment of another commitment. For example, if in a given year the Central City Employment Commitment failed to be met by fifteen (15) Full-time Jobs, but the Fort Worth Employment Commitment was exceeded by fifteen (15) Full-time Jobs, the Central City Employment Percentage applicable to the Program Grant payable in the following year would still be reduced in accordance with Section 6.6 on account of the failure to meet the Central City Employment Commitment. 6.11. Deadline for Payments and Source of Funds. The first Program Grant payable hereunder will be paid by the City on or before June 1, 2020. Each subsequent annual Program Grant payment will be made by the City to Company on or before June 1 of the year in which such payment is due. It is understood and agreed that all Program Grants paid pursuant to this Agreement will come from currently available general revenues of the City and not directly from ad valorem taxes on the Development Site or improvements thereon or on New Taxable Tangible Personal Property that are received by the City. Company understands and agrees that any revenues of the City other than those dedicated for payment of a given annual Program Grant pursuant to and in accordance with this Agreement may be used by the City for any lawful purpose that the City deems necessary in the carrying out of its business as a home rule municipality and will not serve as the basis for calculating the amount of any future Program Grant or other obligation to Company. 7. APPLICATION FEE AND FEE CREDIT. Company has paid an economic development incentive application fee of $5,000.00. Of this, $2,000.00 is non-refundable and will be used to offset costs incurred by City staff in processing the application and preparing this Agreement. The remaining $3,000.00 may be used by Company for application toward any fees charged by the City in connection with the Required Improvements on or before the Completion Deadline. After the Completion Deadline, any unused balance of this credit will be refunded to Company within thirty (30) days following receipt of a written request from Company. Page 16 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 8. DEFAULT, TERMINATION AND FAILURE BY COMPANY TO MEET VARIOUS DEADLINES AND COMMITMENTS. 8.1. Failure to Meet Real Property Commitment or Personal Property Commitment. Notwithstanding anything to the contrary herein, the City will have the right to terminate this Agreement immediately upon provision of written notice to Company, without further obligation to Company hereunder, if the Real Property Commitment, as outlined in Section 4.2, is not met or the Personal Property Commitment, as outlined in Section 4.3, is not met. 8.2. Failure to Use Development Site for Divisional Headquarters Operations. If Company (i) fails to use the Development Site as, at a minimum, its Divisional Headquarters Operations for more than thirty (30) consecutive calendar days at any time during the Term of this Agreement for any reason(other than on account of Company's temporary displacement caused by a casualty to such location and resulting ongoing repairs or restoration to that location necessitated by such casualty), Company will be in default under this Agreement and the City will have the right to terminate this Agreement following provision of notice and opportunity to cure in accordance with Section 8.5. 8.3. No Default for Failure to Meet Fort Worth and M/WBE Construction Spending Commitments, Employment Commitments,Wage Commitment, Salary Commitment, or Supply and Service Spending Commitments. If the Fort Worth Construction Spending Commitment or the M/WBE Construction Spending Commitment are not met, or the Fort Worth Employment Commitment, the Central City Employment Commitment, the Wage Commitment, the Salary Commitment, the Fort Worth Supply and Service Spending Commitment, or the M/WBE Supply and Service Spending Commitment are not met in any given year, such failure will not constitute a default hereunder or provide the City with the right to terminate this Agreement, but, rather, will only cause the amount of the Program Grant that the City is required to pay in the following year to be reduced in accordance with this Agreement. 8.4. Failure to Submit Reports. If Company fails to submit any report required by and in accordance with Section 4.7, the City's obligation to pay any Program Grants at the time, if any, will be suspended until Company has provided all required reports; provided, however, that if any report required hereunder is delinquent by more than one (1) Page]7 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation a . year, the City will have the right to terminate this Agreement following provision of notice and opportunity to cure in accordance with Section 8.5. 8.5. General Breach. Unless stated elsewhere in this Agreement, Company will be in default under this Agreement if Company breaches any term or condition of this Agreement. In the event that such breach remains uncured after thirty (30) calendar days following receipt of written notice from the City referencing this Agreement (or, if Company has diligently and continuously attempted to cure following receipt of such written notice but reasonably requires more than thirty (30) calendar days to cure, then such additional amount of time as is reasonably necessary to effect cure, as determined by both parties mutually and in good faith), the City will have the right to terminate this Agreement immediately by providing written notice to Company. 8.6. Knowing Employment of Undocumented Workers. Company acknowledges that the City is required to comply with Chapter 2264 of the Texas Government Code, enacted by House Bill 1196 (80th Texas Legislature), which relates to restrictions on the use of certain public subsidies. Company hereby certifies that Company, and any branches, divisions, or departments of Company, does not and will not knowingly employ an undocumented worker, as that term is defined by Section 2264.001(4) of the Texas Government Code. In the event that Company, or any branch, division, or department of Company, is convicted of a violation under 8 U.S.C. Section 1324a(f) (relating to federal criminal penalties and injunctions for a pattern or practice of employing unauthorized aliens): • if such conviction occurs during the Term of this Agreement, this Agreement will terminate contemporaneously upon such conviction (subject to any appellate rights that may lawfully be available to and exercised by Company), and Company must repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of the Program Grants received by Company hereunder, if any,plus Simple Interest at a rate of four percent (49,6)per annum; or • if such conviction occurs after expiration or termination of this Agreement, subject to any appellate rights that may lawfully be available to and exercised by Company, Company must repay, within one hundred twenty (120) calendar days following receipt of written demand from the City, the aggregate amount of the Program Grants received by Company hereunder, if any,plus Simple Interest at a rate of four percent (4%)per annum. Page 18 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation For the purposes of this Section 8.6, "Simple Interest" is defined as a rate of interest applied only to an original value, in this case the aggregate amount of Program Grants paid hereunder. This rate of interest can be applied each year, but will only apply to the aggregate amount of Program Grants paid hereunder and is not applied to interest calculated. For example, if the aggregate amount of the Program Grants paid hereunder is $10,000 and such amount is required to be paid back with four percent (4%) interest five years later, the total amount would be $10,000 + [5 x ($10,000 x 0.04)], which is $12,000. This Section 8.6 does not apply to convictions of any subsidiary or affiliate entity of Company, by any franchisees of Company, or by a person or entity with whom Company contracts. Notwithstanding anything to the contrary herein, this Section 8.6 will survive the expiration or termination of this Agreement. 9. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that Company will operate as an independent contractor in each and every respect hereunder and not as an agent, representative or employee of the City. Company will have the exclusive right to control all details and day-to-day operations relative to the Required Improvements and the Development Site and any improvements thereon and will be solely responsible for the acts and omissions of its officers, agents, servants, employees, contractors, subcontractors, licensees and invitees. Company acknowledges that the doctrine of respondeat superior will not apply as between the City and Company, its officers, agents, servants, employees, contractors, subcontractors, licensees, and invitees. Company further agrees that nothing in this Agreement will be construed as the creation of a partnership or joint enterprise between the City and Company. 10. INDEMNIFICATION. COMPANY, AT NO COST TO THE CITY, AGREES TO DEFEND, INDEMNIFY AND HOLD THE CITY, ITS OFFICERS, AGENTS SERVANTS AND EMPLOYEES, HARMLESS AGAINST ANY AND ALL CLAIMS, LAWSUITS, ACTIONS, COSTS AND EXPENSES OF ANY KIND, INCLUDING, BUT NOT LIMITED TO, THOSE FOR PROPERTY DAMAGE OR LOSS (INCLUDING ALLEGED DAMAGE OR LOSS TO COMPANY'S BUSINESS AND ANY RESULTING LOST PROFITS) AND/OR PERSONAL INJURY, INCLUDING DEATH, THAT MAY RELATE TO, ARISE OUT OF OR BE OCCASIONED BY (i) COMPANY'S BREACH OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR (ii) ANY NEGLIGENT ACT OR OMISSION OR INTENTIONAL MISCONDUCT OF COMPANY, ITS OFFICERS, AGENTS, ASSOCIATES, EMPLOYEES, CONTRACTORS (OTHER THAN THE CITY) OR SUBCONTRACTORS, RELATED TO THE DEVELOPMENT SITE, OR ANY IMPROVEMENTS THEREON, INCLUDING THE REQUIRED IMPROVEMENTS, OR OTHER WISE TO THE PERFORMANCE OF THIS A GREEMENT. Page 19 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 11. NOTICES. All written notices called for or required by this Agreement must be addressed to the following, or such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand delivery: City: Company: City of Fort Worth Parker-Hannifin Ccfppration Attn: City Manager Attn: -7&�ycF VM Mcl C 200 Texas St. G 0-3!5,- r0RA►6L*,J0 igtyp Fort Worth, TX 76102 C it i✓ )) d' L/ "t H with copies to: with a copy to: the City Attorney at the same address and Economic Development Director at 1150 S. Freeway, Fort Worth, TX 76104 12. ASSIGNMENT AND SUCCESSORS. Company may at any time assign, transfer or otherwise convey any of its rights or obligations under this Agreement to an Affiliate without the approval of the City so long as Company, the Affiliate and the City first execute an agreement under which the Affiliate agrees to assume and be bound by all covenants and obligations of Company under this Agreement. Otherwise, Company may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of the City Council, which consent will not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by the City Council that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with the City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of Company under this Agreement. Any attempted assignment without the City Council's prior consent will constitute grounds for termination of this Agreement following ten (10) calendar days of receipt of written notice from the City to Company. Any lawful assignee or successor in interest of Company of all rights under this Agreement will be deemed "Company" for all purposes under this Agreement. Page 20 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation r 13. COMPLIANCE WITH LAWS, ORDINANCES, RULES AND REGULATIONS. This Agreement will be subject to all applicable federal, state and local laws, ordinances, rules and regulations, including, but not limited to, all provisions of the City's Charter and ordinances, as amended. 14. GOVERNMENTAL POWERS. It is understood that by execution of this Agreement, the City does not waive or surrender any of it governmental powers or immunities. 15. NO WAIVER. The failure of either party to insist upon the performance of any term or provision of this Agreement or to exercise any right granted hereunder will not constitute a waiver of that party's right to insist upon appropriate performance or to assert any such right on any future occasion. 16. VENUE AND JURISDICTION. If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action will lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement will be construed in accordance with the laws of the State of Texas. 17. NO THIRD PARTY RIGHTS. The provisions and conditions of this Agreement are solely for the benefit of the City and Company, and any lawful assign or successor of Company, and are not intended to create any rights, contractual or otherwise, to any other person or entity. 18. INTERPRETATION. In the event of any dispute over the meaning or application of any provision of this Agreement, this Agreement must be interpreted fairly and reasonably, and neither more strongly for or against any party, regardless of the actual drafter of this Agreement. Page 21 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 19. CAPTIONS. Captions and headings used in this Agreement are for reference purposes only and will not be deemed a part of this Agreement. 20. SEVERABILITY. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired. 21. ENTIRETY OF AGREEMENT. This Agreement, including any exhibits attached hereto and any documents incorporated herein by reference, contains the entire understanding and agreement between the City and Company, and any lawful assign and successor of Company, as to the matters contained herein. Any prior or contemporaneous oral or written agreement is hereby declared null and void to the extent in conflict with any provision of this Agreement. Notwithstanding anything to the contrary herein, this Agreement may not be amended unless executed in writing by both parties and approved by the City Council of the City in an open meeting held in accordance with Chapter 551 of the Texas Government Code. 22. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which will be considered an original,but all of which will constitute one instrument. EXECUTED as of the last date indicated below: Page 22 Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation 1 CITY OF FORT WORTH: PARKER-HANNIFIN CORPORATION, an Ohio corporation: By: S Alanis Nay e: Assistant City Manager Title: SR. lv7w ! 5174-tom 4-dp Lc7�4L j Date: _3 Date: APPROVED AS TO FORM AND LEGALITY: By: _ Peter Vaky Deputy City Attorney M&C: C-27976 10-25-16 ' C - 2�5701 /295'- 2 0/6-/176 /8 A/7-M)c-67 Attested Aof F0,0 Mary J. AAs r LFT. IAL RECORD Page 23 SECRETARY Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation ORTH, TX CONTRACT COMPLIANCE MANAGER: By signing below, I hereby acknowledge that I am the person responsible for the monitoring and administration of this contract, including ensuring all performance and reporting requirements: By: Name of City Employee�� �,�� Title: OFFICIAL EdECUR 1 Page 24(Inserted) CITY SECRETAX Economic Development Program Agreement FT TWO T)C between City of Fort Worth and Parker-Hannifin Corporation ] t EXHIBITS "A"—Map of Central City Economic Development Program Agreement between City of Fort Worth and Parker-Hannifin Corporation EXHIBIT "A" MAP OF CENTRAL CITY CDBG Eligible Areas & Central City X52 76092 i n 761 248 760 76131 ler 76 4 76148 76180 „ 6054 76021 76135 1 76022 n 7 58 u 7611 761 76 76127 4 f �� 761 7 120 76 76012 76 2 7f 1 i 76104 r 761 5 6013 1 7 , 6 J- 11 76016 76015 2 --761 ts- 132 76017 76134 76060 76126 76001 7. 3� 7614 6063 76036 _._._........ / 76028 F 0 1 2 4 6 8 Planning Department FORTWORTH Miles 10/21/04-BK Official site of the City of Fort Worth,Texas CITY COUNCIL AGENDA FoR�H COUNCIL ACTION: Approved on 10/25/2016 DATE: 10/25/2016 REFERENCE C-27976 LOG NAME: 17PARKERHANNIFIN380 NO.. CODE: C TYPE: NOW PUBLIC NO CONSENT HEARING: SUBJECT: Authorize Execution of Economic Development Program Agreement with Parker-Hannifin Corporation for a Manufacturing and Office Consolidation Located at 4701 Mercantile Drive (COUNCIL DISTRICT 4) RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to execute an Economic Development Program Agreement with Parker-Hannifin Corporation for the consolidation of existing business operation into a 242,000 square foot expansion to support increasing business needs at 4701 Mercantile Drive; and 2. Find that the terms and conditions of the Agreement, as outlined below, constitute a custom- designed Economic Development Program, as recommended by the 2016 Comprehensive Plan and authorized by Chapter 380 of the Texas Local Government Code. DISCUSSION: Parker-Hannifin (Company) is a global diversified manufacturer of motion and control technologies and systems that is looking to consolidate two business operations, including a manufacturing component in Fort Worth, by creating a world-class divisional headquarters facility. Company will renovate an existing call center facility and expand it into a 242,400 square foot office and manufacturing facility to house Parker's Stratoflex Divisional Headquarters, located at 4701 Mercantile Drive. Company will make a capital investment of at least $25.5 million in real and business personal property improvements(exclusive of land costs) by December 31, 2017. The Company will spend or cause to be expended the greater of 20 percent or $4,340,000.00 of all hard construction costs with Fort Worth companies, and will spend or cause to be expended the greater of 15 percent or $3,255,000.00 of all hard construction costs with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies The Company will also retain 525 full-time equivalent (FTE) positions on the property by December 1, 2018. The Company will fill a minimum of 40 percent of all FTEs with Fort Worth residents and a minimum of 20 percent of all FTEs with Fort Worth Central City residents. The Company will spend the greater of 35 percent or $1,400,000.00 in annual discretionary service and supply expenses with Fort Worth companies, and the greater of 20 percent or $800,000.00 in annual discretionary service and supply expenses with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies In return, the City will pay the Company 10 annual Economic Development Program grants, as authorized by Chapter 380, Texas Local Government Code. The maximum annual program grant will be equal to 60 percent of the incremental value of real and business personal property taxes on the development. Staff recommends entering into an Economic Development Program Agreement with the Company for this project. Except for cases of default, failure to meet a particular commitment will result in a reduction to the grant amount that Developer is entitled to receive in a given year based on the value assigned to the commitment in accordance with the following chart: Developer Commitment Potential Grant Real and Personal Property Investment 25 Percent 20 Percent Fort Worth Companies J5 Percent 15 Percent Fort Worth M/WBE Companies �2.5 Percent 40 Percent Employment of Fort Worth Residents _ 15 Percent 20 Percent Employment of Central City Residents _�5 Percent 35 Percent Fort Worth Service and Supply Expenses _�5 Percent 20 Percent FW M/WBE Service and Supply Expenses t Average wages _ 7.5 Percent Total _�66 Percent This project is located in COUNCIL DISTRICT 4. FISCAL INFORMATION/CERTIFICATION: The Director of Finance certifies that approval of this Agreement inill have no material effect on the Fiscal Year 2017 budget. While no current year impact is anticipated from this action, any effect on expenditures and revenues will be budgeted in future fiscal years and will be included in the long- term financial forecast. TO Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year Chartfield 2 FROM Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year Chartfield 2 Submitted for City Manager's Office by: Jay Chapa (5804) Originating Department Head: Robert Sturns (212-2663) Additional Information Contact: Ossana Hermosillo (212-2665) ATTACHMENTS Parker-Hannifin map.pdf PH 1295 form.pdf Official site of the City of Fort Worth,Texas .. „ CITY COUNCIL AGENDA Foe TWoRTH COUNCIL ACTION: Approved on 12/12/2017 DATE: 12/12/2017 REFERENCE NO.: **C-28501 LOG NAME: 17PH380_AMEND CODE: C TYPE: CONSENT PUBLIC NO HEARING: SUBJECT: Amend M&C C-27976 Authorizing Execution of Economic Development Program Agreement with Parker-Hannifin Corporation to Extend the Deadline for Completion of a Manufacturing and Office Consolidation Located at 4701 Mercantile Drive (COUNCIL DISTRICT 4) RECOMMENDATION: It is recommended that the City Council approve an amendment to M&C C-27976, which authorized execution of an Economic Development Program Agreement with Parker-Hannifin Corporation for a manufacturing and office consolidation located at 4701 Mercantile Drive, to extend the deadline for completion of that project to March 31, 2019. DISCUSSION: On October 25, 2016 Mayor and Council Communication (M&C C-27976) the City Council authorized the execution of an Economic Development Program Agreement (Agreement) with Parker-Hannifin Corporation (Company) for the consolidation of its existing business operation into a 242,000 square foot expansion to support increasing business needs at 4701 Mercantile Drive. Under the Agreement, the Company must invest at least $25.5 million in real and business personal property improvements (exclusive of land costs) and have at least 525 full-time equivalent jobs filled on the property by a date certain (defined as the Completion Deadline). In return, as authorized by Chapter 380, Texas Local Government Code, the City will pay Company 10 annual economic development program grants in an amount not to exceed 60 percent of incremental real and personal property taxes. Due to delays in finalizing development plans upon conducting an environmental assessment on the site, the construction schedule had to be pushed out. In order to fulfill the commitments of the Agreement, the Company has requested a revised completion deadline of March 31, 2019. Staff has no objection to this request. It should be noted that in the course of negotiations with Company, Staff agreed to a completion deadline of December 31, 2018. However, the M&C incorrectly referenced a deadline of December 31, 2017. All other terms and conditions spelled out in the M&C will remain the same, except that the timeframe for performance of all obligations specified for 2018 will be pushed by one year to 2019. The Company will spend or cause to be expended the greater of 20 percent or $4,340,000.00 of all hard construction costs with Fort Worth companies, and will spend or cause to be expended the greater of 15 percent or $3,255,000.00 of all hard construction costs with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies. The Company will fill a minimum of 40 percent of all FTEs with Fort Worth residents and a minimum of 20 percent of all FTEs with Fort Worth Central City residents. The Company will also spend the greater of 35 percent or $1,400,000.00 in annual discretionary service and supply expenses with Fort Worth companies and the greater of 20 percent or $800,000.00 in annual discretionary service and supply expenses with companies that are Fort Worth Certified Minority/Women Owned Business Enterprise companies the maximum annual program grant will be equal to 60 percent of the incremental value of real and business personal property taxes on the development. This project is located in COUNCIL DISTRICT 4. FISCAL INFORMATION/CERTIFICATION: The Director of Finance certifies that approval of this Agreement will have no material effect on the Fiscal Year 2018 budget. While no current year impact is anticipated from this action, any effect on expenditures and revenues will be budgeted in future Fiscal Year:; and will be included in the long- term financial forecast. TO _ Fund Department Account Project Program Activity Budget Reference# Amount ID ID Year (Chartfield 2)T� FROM Fund I Department I Account Project Program Activity Budget (Reference#� Amount ID ID Year Chartfield 2 Submitted for City Manager's Office by: Jay Chapa (5804) Originating Department Head: Robert Sturns (212-2663) Additional Information Contact: Ossana Hermosillo (212-2665) ATTACHMENTS Form 1295 - PHC-Nov20l7.pdf